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Transport Investment Forum 2001

FOREWORD

SUMMARY OF FORUM ISSUES, CONCLUSIONS AND WAY FORWARD

OPENING STATEMENTS

Statement of Hon. Bernhardt Esau, Deputy Minister of Trade and Industry, Republic of Namibia

Statement by Cooperating Partner: Marie Francoise Marie-Nelly, Programme Manager for Regional Integration, Africa Region, World Bank

Statement by Cooperating Partner: Ambassador F.J. Oritz de Zuniga, Head of delegation, Delegation of the European Commission in Namibia

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Statement by the Chair of the Committee of Ministers of SATCC ana L * e r . o f Transport and Communications of Mozambique: Hon. Tomaz Salomac -\

Oficial Opening: Hon. Rev. Hendrik Witbooi, Deputy Prime MinkL .\,, Republic of Namibia

SESSION 1 - SADC GROWTH & INTEGRATION POTENTIAL

1.1 Potential and Prospects for Economic Growth and Integration of the Southern African Region: Dr. Prega Rarnsamy, Executive Secretary, SADC

1.2 Transforming Transport in Support of Regional Growth and Integration - Status, Prospects and Challenges Facing the Sector: Hon. Prof. Nkandu Luo, Minister of Communications and Transport, Zambia

SESSION 2 - THE INVESTMENT CLIMATE

2.1 Private Sector Perspectives on Conditions for Attracting Investment: Paulo Fumane, Coordinator, Nacala Development Corridor

2.2 Investment Processes and Financing Optibns: Alastair Campbell. Head of General Infrastructure, Project Finance, Standard Bank,

2.3 FDI Flows into Africa - Trends, Constraints and the Way Forward: Arvind Radhakrishna. Multilateral Investment Guarantee Agency (MIGA)

SESSION 3 - STATUS OF REFORMS & PRIVATE SECTOR PARTICIPATION

3.1 Status of Implementation of the SADC Protocol on Transport, Communications and Meteorology (PTCM), Sandra Coetzee, Managing Director, Consilium Legis (Pty) Ltd, South Africa


FOREWORD FROM THE MINISTER OF WORKS, TRANSPORT AND COMMUNICATION, REPUBLIC OF NAMIBIA

The transport sector occupies a central position in the development of all sectors of our economies and in facilitating integration of our economies internally and internationally.

Adequate supply of efficient, cost-effective, safe, affordable and reliable transport infrastructure and transport services is critical to increasing productivity in all sectors of our economies and for sustainable development.

The historical effort of our governments in providing the required transport infrastructure is paramount. However, the success in future delivery of transport infrastructure and transport services lies very much in participation of the private sector ownership. operations and management of activities within the transport sector.

'-Y . To participate in integration of regional transport, Namibia has a memorandu,. \. understanding on cross-border transport between Southern African Customs Unio. ''. (SACU) Member States, and road transport agreements with Zambia and Zimbabwe.

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Efforts are being made to establish a road transport agreement with Angola.

It is worth noting that Namibia has made great efforts in establishing infrastructure that serves in integrating regional transport systems. These include the Trans-Kalahari Highway, which was completed in December 1997. The Highway is designed as Route 40 of the SADC Regional Trunk Road Network (RTRN), and extends from the Walvis Bay Port through Windhoek, the capital of Namibia, through Lobatse in Botswana, and link:; Gauteng Province. which is in the Northern part of South Africa.

The construction of the Trans-Caprivi Highway part in Namibia is virtually completed. The highway now provides easy access to markets in southern Congo, Malawi, Zambia, and Zimbabwe.

The development of modem container handling facilities and deepening of the Walvis Bay port to 12.8 meters Chart Datum was completed in June 2000. The port is well positioned to serve as the western gateway to the SADC region, particularly in trade with Europe and the Americas.

To ensure full utilization of heavy capital infrastructures along the transport comdors, the Government has embarked on a policy to encourage the private sector in generating valuable business opportunities along the conidors. In addition, Government has also1 created opportunities for the private sector to invest in the management. operation, and maintenance of existing corridor infrastructures.

To create a conductive environment for private sector participation, the Government in 1995 launched a White Paper on Transport Policy, which was directed at liberalization and increasing competition of services in all transport modes.


MESSAGE FROM THE DIRECTOR OF THE SOUTHERN AFRICA TRANSPORT AND COMMUNICATIONS COMMISSION-TECHNICAL UNIT (SATCC-TU)

The Southern Africa Transport and Communications Commission (SATCC) has been actively involved in creating an enabling environment in the transport sector in the Southern African Development Community (SADC), characterised by harmonisation in policy and legislative reforms at regional and national levels.

This was to ensure future provision of an adequate transportation infrastructure that would be a catalyst for effective regional integration.

More important. to ensure that participation of the private sector in direct in,-, in transport infrastructure and operations of previously state-owned public sector L enterprises are given more impetus. '\I

The objective of this forum is to give the long waited opportunity to our partners in SADC , and the World at large an insight as to what has taken place in the sector since the ratification of the Protocol on Transport, Communications and Meteorology in 1998.

Following the ministerial SADC Conference on Transport, held in Maputo in October 1998, there has been significant progress in policy reforms and enactment of legislative provisions in member States. This has enabled the private sector to indeed start taking on their role as key partners in investment in transport.

The forum is for sharing with you success stories, opportunities that are unfolding in the short, medium and long terms, and a continuation of business dialogue between the SADC region's public and private sectors. A representative sample of opportunities available in the various transport modes along the development corridors and at national level will be the basis of the networhng and information sharing that will take place.

May the experience be stimulating and rewarding and result in a new era of partnerships in an integrated transport structure for the SADC region.

Eric Msolomba Director: SATCC - Technical Unit


Moderator: Hon. Moses Amweelo, Minister of Transport and Communication of the Republic of Namibia

Facilitator: Eric Msolomba, Director of the Southern Africa Transport and Communications Commission (SATCC) Technical Unit (TU)

The Forum was officially opened by Hon. Rev. Dr. Hendrik Witbooi the Deputy Prime Minister of the Republic of Namibia. In his remarks, the Deputy Prime Minister observed that one of the major issues and concerns in the region was crushing poverty affect~ng the majonty of the populations in the SADC countries. He noted th-.t if overty was not properly addressed. the basic social values and systems of the r e , L j l l increasingly be threatened, and ultimately the rule of law would be under threat. ' - The Deputy Prime Minister indicated that the transport sector could contribut,. significantly to economic development. He observed that an efficient transport sector would result in reduced transport costs, which, in turn, means reducing the transport cost component of goods within the SADC countries, which constitutes a considerable part of consumer goods in the reglon. The resulting savings, he ~nd~cated. would release resources, which can be channeled into other productive sectors of the economy.

He further observed that in addition to addressing poverty, other additional and important benefits arising from an efficient transport system are that it would make the region more competitive internationally, further holding the promise of promoting economic growth and reducing poverty.

Prior to the official opening by the Deputy Prime Minister, statements were made a!; follows: - Statement of welcome by Hon. Bernhardt Esau, M.P., Deputy Minister of Trade

and Industry of the Republic of Namibia

Statement by the World Bank made by Marie Franqoise Marie-Nelly, Program, Manager, Regional Integration and Cooperation, Africa Region

Statement by a cooperating partner made by Ambassador F.J. Ortiz de Zuniga, Head of Delegation, Delegation of the European Commission in Namibia

Statement by the Chair of the SATCC Committee of Ministers, Hon. Tomaz Salomao who is also Minister of Transport and Communications of the Republic of Mozambique


continued civil strife and political instability in some countries; small undevelopecl markets; and inadequate physical, institutional and financial infrastructure.

Challenges facing the transport sector: transport and communications systems still face. challenges of accessibility, affordability, efficiency, viability and general quality of service. These weaknesses prevail n spite of the fact that transport and communications infrastructure and services play a catalytic and facilitating role in support of the broader goals of economic growth and regional integration.

Impact of transport: efficient transport can have a visible and positive multiplier effect on social sectors such as health, education and in promoting good governance and political stability by improving social interaction and cohesion. It also facilitates trade between countries and broadens prospects for countries with small markets.

Macro-economic reforms: since the 1990's. countries in the region have impiL ' T d comprehensive macro-economic stabilisation and structural adjustment policies inch thc adoption of policies and changes in regulatory frameworks to encourage private sectb. participation in the provision, financing and management of infrastructure and other promolion measures to attract investment.

Private sector participation: given the indebtedness of may SADC countries and their limited access to capital markets. involvement of the private sector in infrastructure project financing is important. Infrastructural development could thus, be an important vehicle for attracting foreign direct investment and enhancing management capacity.

Free Trade Area: the creation of Free Trade Area (ETA) should broaden the market and make the regional economic space more attractive for investment, thus increasing the region's growth potential.

New development approaches: the region has embarked on innovative development approaches that could facilitate the "unlocking" of development potential through investment in transport and infrastructure projects as well as economic projects. These initiatives are the Development Conidors and Spatial Development Initiatives (SDIs).

Restructuring of SADC: the restructuring of SADC, which is on-going, is intended to realign the institution with the development integration objective. The centralisation of the SADC Programme of Action would contribute to improved strategic planning and policy harmonisation in the region, thus, helping to create a conducive environment for investors. The rationalisation of SADC will also permit a more inclusive approach for meaningfully involving the private sector and other stakeholders in the community building process.

Rural infrastructure: in promoting investment to the transport sector of the region, the infrastructure needs of the rural areas should not be neglected as improvements in rural infrastructure can have a major impact in improving productivity and opening up opportunities for employment and income generation.

Transvort Investment Forum 2001

Desired Outcome:

Consensus on measures to improve the investment environment including the legal1 and institutional frameworks necessary to create a transparent and conduciv'e investment environment

A common understanding of minimum requirements necessary to satisfy the needs of investors and what the region needs to do to meet these thresholds

A discussion of investment flows into Africa and strategies to promote increased investment flows to the SADC region

An understanding of what the region has done and is doing to address the challenge,^ of creating a conducive investment climate

Presentations: 4

Private sector perspectives on conditions for attracting investment. Paulo Fum, , Project Manager, Nacala Development Comdor

Investment processes and financing options, Alastair Campbell, Head of General Infrastructure. Project Finance. Standard Bank

* FDI flows into Africa - trends, constraints and the way forward, Arvind Radhakrishna, Regional Advisor, lnvestment Marketing Services, Multilateral Investment Guarantee Agency (MIGA)

Summary of Main Issues:

Arising from the presentations and discussions, the following issues emerged:

Investment opportunities: to attract investment, there must be credible, commercialIy viable opportunities for investors to respond to; the private sector must be innovative in identifying opportunities and not always wait for governments; and in turn, governments must make opportunities available by releasing them (through restructuring, concessions, privatisation or by creating opportunities for investments in "greenfield" areas).

Pre-requisites for project financing: there are three key pre-requisites for financing a transport project - the project must fit into a transport Master Plan; government must provide measures for credit enhancement (e.g., making available surplus land and land development rights, and providing guarantees): and there should be a well defined and transparent procurement process.

Regulatory frameworks: although in place, legislative frameworks in the SADC region are currently inadequate to address and entrench private sector needs. The legislative framework must be clear including measures for project protection (risk mitigation), supported by open and properly adjudicated bidding processes linked to clear timelines - processes must be conclusive and not be too lengthy as this can add to costs and deter investor interest.


Joint marketing of region: joint and more aggressive marketing campaigns to improve the image of region; joint investment promotion; improved coordination among investment promotion agencies and bodies; better use of region's diplomatic and trade missions abroad to mobilise investment; and related measures.

Innovative financing approaches: innovative financing approaches by financiers particularly to provide finance for "middle-ground" (medium scale) investments; government support to making projects more attractive to investors through credit enhancement measures: and more visibility by financiers in making governments ancl project promoters aware of their financing requirements.

Cutting red-tape: reducing red-tape for investors in such areas as. land acquisition; granting of licenses and work permits; simplification of employment codes; expediting the granting of incentives and tax breaks as appropriate.

Promoting transparent regulatory and procurement frameworks: creh - aL transparent regulatory and procurement environment free of corruption, political- government interference and charactensed by accountability.

Proper packaging of projects: proper packaging of projects before they are submitted to potential investors to ensure that they fit within a viable transport Master Plan and address investor needs. This saves time and raises the prospects for favourable consideration by potential investors.

SESSION3 STAWB OF REFORMS AND PWATE SECTOR PAWTICIPATfON

Moderator: Hon. Titus Mlangeni, Minister of Public Works and Transport, Kingdom of Swaziland

Facilitator: Dr. Munorweyi E. Dhliwayo, Senior Economic Affairs Officer (Transport), United Nations Economic Commission for Africa (UNECA), Regional Office for Southern Africa

Technical Expert: Barney Curtis. Executive Director, Federation of Eastern and Southern African Road Transport Associations (FESARTA)

Session Objectives: To develop a common understanding of the transport reform process in Southern Africa and potential partnerships between the public and private sectors in deepening and accelerating these reforms.


frameworks have been created and reforms are on-going in various transport sub-sectors -- roads; road transport: road traffic; railways; maritime; civil aviation; as well as defining the institutional framework, national and regional for implementing the reforms.

Protocol provides framework for investment: the protocol provides an enabling environment for investment and promotes private sector participation. This is through enabling legislation: options for restructuring and government divestiture, thus releasing public assets to the private sector; increased investment opportunities through, corporatisation, joint ventures, concessions etc; setting out fair and transparent procurement rules; encouraging publiclprivate partnerships in the planning andl monitoring of transport systems and services; and establishing independent regulatory agencies.

Publiclprivate sector partnership growing: the private sector through relevant trade and industry association is now involved in regional decision making %rough participation in sub-sector committees (SCOMs) of SATCC.

Infrastructure finance: infrastructure finance has taken root in South Africa more than ;

any other SADC country. Examples are toll road projects now emerging in South Africa. '. There are various sources and combinations for financing infrastructure projects, they include, limited recourse project finance; corporate finance; bank loans; and equity participation; or a combination of these.

Importance of roads: road transport accounts for about 80% of all movements in Southern Africa with a contribution to Gross Domestic Product (GDP) of between 5 to 6%. There is a parallel between investment in roads and economic growth with higher investment levels translating into higher levels of economic growth.

Road reforms: the region has moved from a situation where road policies were characterised by, state provision of roads; insufficient dialogue with end users; supply led rather demand driven provision; and generally inadequate policies to, providing a framework for the commercial management of roads incorporating public and private sector stakeholders; and ensuring adequate and stable supply of funds to the roads sector.

Rail vision: the Protocol implores railways of the region to have a common vision for the goals of developing and harmonising rail transport in the region and ensuring orderly efficient cross-border rail conveyance. However, for this vision to be achieved requires initiatives by the railways themselves. (something which is already happening), but also support from governments to ensure that adequate polices are put in place to promote a level playing field between road and rail.

Corridor approach to provision of rail services: SADC railways have embarked on a corridor approach to the provision of rail services with emphasis on service efficiency and on providing a total transport logistics solution to the customer.


Moderator: Hon. David Magang, Minister of Works, Transport and Communications of the Republic of Botswana

Facilitator Sianga Malumo, Director, Fieldstone Africa (Pty) Ltd

Technical Experts: Geoff de Beer, SDI Specialist and World Bank Consultant

George M. Thompson, Investment Analyst and USAID Consultant

Session Objectives: To present and obtain a good understanding by potential investors of investment opportunities in the Southern African region in the transport sector specifically and*'her sectors generally and to obtain buy-in from investors.

Desired Outcome:

Potential investor understanding of investment opportunities in the transport sector

Presentation of specific projects

Promoting interactive dialogue between project promoters and potential investors

Generating investor interest and obtaining buy-in and commitment

Ultimately translating interest and commitment into actual investments

Presentations:

Overview of investment prospects in Southern Africa, Dr. Antonio Pinto, Chair, SATCC Committee of Senior Officials

Investment opportunities in transport in Southern Africa, Nils Bruzelius, Project Analyst and World Bank Consultant

The SADC Upper Airspace Control Center, Omari Nundu, Aviation Expert, SATCC-TU

Overview of Development Corridors and Spatial Development Initiatives (SDIs). Manual Ruas, Project Manager, Beira Development Corridor

Summary of Main Issues:

Abundant regional resource base: the SADC region has a tremendously rich and diversified resource base, which to date, has remained significantly underdeveloped. A key aspect of unlocking this abundant resource base is the development of an integrated, seamless and efficient transport system.

17


Moderator:

Facilitator:

Technical Experts:

Session Objectives:

Hon. Moses Amweelo, Minister of Works, Transport and Communications of the Republic of Namibia

Eric Msolomba, Director, SATCC-TU

All Forum Experts

To reach consensus on the way forward, accelerate reforms, mobilise investment resources and, change transport in support of growth and integration in Southern Africa.

Desired Outcome:

Agree on key issues and opportunities in the transport sector

Identify major constraints and challenges and agree on prioritised measures to tackle \

these constraints and challenges

Agree on practical measures to move the regional transport agenda forward recognising the need to maintain the integrated nature of the transport system

Define modalities for effective partnerships involving, governments. the private sector and cooperating partners

Agree on concerted measures to mobilise investment for the transport sector

Presentations:

Way forward and follow-up activities, Sakhe Silo, Senior Policy Officer, SATCC: Technical Unit

Vote of Thanks, Hon. David Magang, Minister of Works, Transport and1 Communications of the Republic of Botswana

Final remarks and close of Forum, Hon. Moses Amweelo, Minister of Works., Transport and Communications of the Republic of Namibia

Summary of Main Issues and Conclusions:

Important issues came out of the closing remarks by the two Ministers. These included:

Need to continue investment promotion efforts: there is need to recognise that while it is important to continue to mobilise investment for the transport sector, transport is not the only sector coordinated by SATCC or of concern to the region. There are other sectors such as, telecommunications, postal services and meteorology. It is the expectation that cooperating partners, can in the near future, support the convening of similar investment forum in these sectors.

Trans~ort lnvesmtent Forum 2001

5. Creation of a conducive macro-economic environment with transparent regulatory frameworks and in particular, reduction of investment risks by the government through providing the necessary incentives, which can effectively mitigate the risk to investors.

6. SATCC to continue promoting effective dialogue between the private and the public sectors to address in a pragmatic way issues that impede the efficient operation of the region's transport systems.

7. Governments should develop credible, commercially viable opportunities responsive to clear transportation master plans.

8. Governments to facilitate trans-boundary investment in line with the corridor development concept.

B. Operational Improvements

9. Promotion of integrated transport to facilitate complementarity of modes f ~ . effective utilisation of infrastructure systems in region. 4

10. Multi-disciplinary approach towards addressing border post problems through introduction of one-stop-border posts and introduction of pilot projects.

11. Use of Information Technology to improve operational efficiency in transport.

C. Marketing and Investment Mobilisation

12. Setting up one stop investment processing units by all Member States particularly where they do not exist to fast track investment.

13. The investors to follow-up on projects as presented in the background papers with an indication of information required to move the projects forward. The contact addresses and e-mails are provided.

14. Improving the rural transport infrastructure so that it becomes an effective feeder system into the regional transport system and helps to create opportunities in the rural areas.

15. Promotion of the corridor development and the spatial development initiatives to unleash their economic potential by inclusion and prioritisation in the national development plans.

16. Aggressive marketing of the investment opportunities at national and regional levels to sustain the momentum, which has been generated through the Forum.

17. A new approach to mobilisation of resources with provision and operation of infrastructure services being provided via investment from the private sector whilst donor funds should be directed towards policy development and reforms.


programmes in place if we do not ensure that other economic suppartive systems in our region are fully functional and harmonious. In this respect, programmes in areas such a!; transport, telecommunication, customs cooperation, etc should be given due consideration.

Therefore, we are convening this SADC Transport Investment Forum at very critical time when globalization and liberalization are the main driving forces of the world economy. SADC as a community offers an indispensable framework through which we could achieve our common aspirations of deepening and to consolidating our regional integration agenda. To this end, SADC has identified transport as one of the priority sectors for liberalization at the regional and at the multilateral level.

Transport presents SADC with great potential for growth and enhanced competition on the international markets. An effective and efficient transport system through which SADC could realize its shared values is a prerequisite for the achievement of a dynamic and strong regional economy. It is only on the basis of a strong regional transport sys . 1.1 that SADC would be able to meaningfully interact within global market place.

t

The state of infrastructure (i.e. roads, rails, and ports) in our region is insufficient for current and expected volumes of Trade in SADC. In this regard, both public and private investments are essential to realize trade expansion as envisioned in the SADC Trade Protocol.

SADC has already embarked on programmes to develop and improve its transport system through projects like the Maputo Comdor, Trans-Kalahari and Trans-Caprivi Highways,

.and Namibia-Angola Rail, just to mention but a few. SADC Member States also have made substantial progress in the reform of the transport sector for example the concessioning of railways and ports in Mozambique, Malawi and partly privatization of airlines and airports in South Africa as well as the establishment of dedicated road funds, autonomous road boards and agencies and independent regulatory authorities in most Member States of SADC.

Hon. Deputy Prime Minister, Distinguished Delegates, at this time when Governments are assuming administration roles, rather than provision of public services, the private sector involvement in infrastructure development becomes a very essential element of mutual recognition of benefits that could accrue from transport sector development.

An efficient transport system can play a pivotal role in facilitating trade and ensuring that goods and services are delivered timeously. However, such an undertaking should be complemented by efficient border post procedures, customs and immigration facilitation and harmonization of traffic laws and mutual recognition of driving licenses, etc.

Finally, allow me once again to welcome you home and wish you fruitful discussions during your deliberations and we are looking forward to a beneficial outcome with our cooperating partners. I thank you.

Tmnsport Investment Forum 2001

the management of natural resources and the strengthening of the human resource base. Currently, we are preparing a progress report to assess its results with a view to update it, taking into account recent developments in the region.

As for the transport sector, the Bank has sought to help the SADC community achieve the Protocol objectives through coordinated country-based, as well as regional actions. In particular, we have increased our efforts to support harmonization of policies and regulations of individual countries, such as Mozambique. Malawi. Zambia, Tanzania and Mauritius. We have also intensified our relationship with SATCC to support the policy dialogue at the regional level and have actively contributed to the preparation of this Forum. Moreover, the Bank Group has played an active role in supporting the initiation of' the regional SDI processes through its involvement in various aspects of the Maputo Corridor initiative.

This Forum is very timely for us. as it will provide us with an opportunity to obtain an update on the status of implementation of reforms, and on the strategic vision of ,& SADC region. We. thus. look forward to receiving guidance on our future support to the SADC transport sector within the regional integration framework. While detailed elements of such support need to be defined in an operational context, it could broadly cover areas such as: (i) harmonization of reforms at the country level: (ii) transport and trade facilitation across borders; (iii) measures aimed at increasing other, non-transport elements of the logistics chain; and (iv) regional SDls. This would help promote the use of untapped econonlic resources and in turn increase the viability of transport operations in the region.

I want to close my remarks by returning to the key theme of this Forum: Transpofl Investment. I would like to reiterate that the World Bank Group can help in a wide variety of ways, first of all on policy reforms that will create the enabling environment for greater private sector involvement, second on direct contribution to financing of private projects through the International Finance Corporation (IFC), our private sector window. and third on risk mitigation instruments through the International Development Agency (IDA) and Multilateral Investment Guarantee Agency (MIGA). Finally, we will not be effective unless we pursue and intensify our cooperation with other development partners, which support your efforts. so as to ensure synergy in our support and efficient allocation of resources.

Honorable Prime Minister, Chairman, honorable Ministers, ladies and gentlemen, I want to thank you very much for this opportunity to speak to you. Allow me to express my best wishes for a successful Forum and please be assured of our commitment to contribute to the implementation of its recommendations.


exclusive public domain for too long. We believe the forum is a unique opportunity for the private sector to share experience on recent investments in transport and comdor developments and to have a constructive dialogue with its public counterparts on upcoming opportunities and the way forward. The development of the Maputo Comdor with its considerable input of private investment is considered by many as a model case. I know for certain that Namibia is presently undertaking considerable efforts to develop and promote another corridor project, the Walvis Bay, linking its deep sea port foremost with its landlocked neighbours to the east, but also with its direct neighbours to the south and north. The relatively young Walvis Bay Corridor Group, a public-private partnership of' all interested stakeholders in the comdor development is certainly represented at this forum pursing business opportunities.

The European Commission will continue to follow with great interest the developments in the sector and we shall continue to encourage public-private partnership and private investment where it is for enhancement of benefits for the people in the region. The willingness of private investors to be a partner in this business depends heavily on ti.j,,,, perception of investment security. Political stability and predictability as well as good .' governance combined with an efficient and sound public administration are cornerstones in this consideration. Coherent and integrated policies, supported by all SADC member states will facilitate and accelerate the process of regional integration. In this regard, the European Commission will stand by its partners in the region and continue to co-operate with SADC on a regional level and with its member states on national levels. We shall continue to be a key player in promoting sustainable transport in support of economic growth and poverty reduction and in facilitating regional trade and integration.

Statement by the Chair of the Committee of Ministers of SATCC

Hon. Tomaz Salamao

Minister of Transport and Communications, Mozambique

Hon. Rev. Dr. Hendrik Witbooi, Deputy Prime Minister of the Republic of Namibia, fellow ministers, distinguish heads of diplomatic missions, distinguish delegates, ladies and gentlemen.

Let me join Hon. Amweelo in welcoming you to this SADC Transport Investment Forum.

It is, indeed, a pleasure to see such an overwhelming response to the invitation. On behalf of my fellow ministers of the Committee of Ministers of Transport and Communications in the fourteen member states of SADC, I take this opportunity to thank you all for this show of support and solidarity with the region and our aspirations.


The third is that the region has received commendable investment in the transport sector over the years, thanks to the support of the cooperating partners. The new opportunities offered by privatisation also hold promises of technology advance. Clearly, the improvement of the region's transport sector must be the result of a partnership between the public and private sector in real terms. Although the investment flows to the region are noticeable, more is needed to correct the imbalances and deficiencies of the past.

The fourth point is the increasing partnership between the public and private sector not just in investment, but also in formulating regional policies.

I am pleased to note and to inform this forum that we now have private sector led regional trade and industry associations that are emerging as partners in this process.

Among these associations I include:

The Association of SADC Chambers of Commerce and Industry;

The Southern African Enterprise Network;

The Southern African Railways Association;

The Federation of Regional Road Freight Associations;

The Federation of Clearing and Forwarding Associations of Southern Africa;

The grouping of informal traders in the region;

The Cross-border Traders Association.

While publiclprivate sector partnership for policy dialogue is commendable, it needs to be sustained and this requires resources. I am therefore appealing to our larger players in the private sector, investment banks, contractors, major transport companies including those from outside the region, to commit resources and time to elevate the dialogue and, therefore, improve its impact. I am looking forward to practical proposals on how you who have the resources, can help us governments in this respect.

This forum is a unique opportunity for information sharing and learning from each other's experiences. We see the forum as addressing the following specific goals:

Reviewing how far the region has come in terms of embarking on reforms and collectively exploring further measures that are required in this regard;

Presenting what we consider attractive investment opportunities available in the region in anticipation that we will generate enough interest from the private sector to invest;

Initiating dialogue, something we see as an on-going process, on measures to improve the performance and efficiency of the region's transport system;


Official Opening

Hon. Rev. Hendrik Witbooi

Deputy Prime Minister, Republic of Nanlibia

Mr Chairman. Honourable Ministers from SADC Member States, Distinguished Senior Officials, Esteemed Investors and Financiers, Distinguished Captains of Industries. Ladies and Gentlemen.

It gives me great pleasure to open this very important event of the Southern Africa Development Community organised by the Transport and Communications Commission. On behalf of the Government and the people of the Republic of Namibia I extend a hearty warm welcome to our trading partners and all our important visitors, those from within the region or from further afield.

I know that your time will be much occupied in discussing matters of great importance for the entire Southern African Development Community (SADC) during the next few days. However, I sincerely hope that you will find time in your busy schedules to enjoy your stay in Namibia and to experience our wonderful hospitality.

SADC, as a regional economic grouping, recognises that it has an increasingly important role to play in co-coordinating the efforts of individual Member States to promote economic development in our respective countries. Most Member States of SADC have already adopted policies, which have as their objectives the more efficient performance of their economies through institutional change and transforming the traditional role of Governments in our national economies. I am sure that you will hear more about these policies during the course of the next few days. It is necessary, however, to co-ordinate and integrate these efforts. particularly as far as transport is concerned, so that the regional economy as a whole will also perform more efficiently.

I, therefore, wish to congratulate and commend the Southern Africa Transport and Communication Commission (SATCC) for organising this Transport Investment Forum. During the next few days, the focus will be on the transport sector but I know that everyone here will be aware that the transport sector is but one of the crucial sectors of our respective economies and that similar developments are taking place in other sectors.

The aim of the Forum is to bring together policy makers. investors, financiers, donors and other stakeholders from the region and other parts of the world with a view to market investment opportunities and to attract investment in the transport sector. Another important aim is to obtain the views of potential investors and stakeholders as to how the task of creating an enabling environment that favours private investment and promotes private/public partnerships may best be tackled by the Governments in the region.

Transoort Investment Forum 2001

The resulting savings will release resources, which can be channeled into other sectors of the economy. There is an additional and important benefit, a more efficient transport sector will make the region more competitive internationally, which, of course, holds the promise of further promoting economic growth and reducing poverty in our Community.

Mr Chairman, I am sensitive to the fact that we are still in the early stages of implementing our new policies and strategies. We can expect that we shall have to adjust our strategies as may be necessary from time to time. This we will commit ourselves to do by constantly monitoring our performance along the path that we have chosen and by a process of open communication between Governments and other participants.

The Government of the Republic of Namibia has since 1990, the year of our Independence, endeavoured to create an effective and efficient transport sector. This we have done and are still doing by firstly developing our transport infrastructure. Namibia is now linked to Botswana. Zambia and Zimbabwe with bitumen-surfaced roads facilitating inter-regional trade and the movement of goods from and to international markets.

The ports of Walvis Bay and Liideritz have been expanded to accommodate larger vessels and to handle greater quantities of cargo. The Walvis Bay airport will, in the short term, be extended to accommodate intercontinental flights, which will further promote the Economic Processing Zone at the harbour town and facilitate the export of fresh fish and other products to overseas markets.

Namibia is also extending the rail network to the border with Angola as the first step in joining the railway systems of the two countries. Investigations are now underway on an east-west transport comdor linking the Trans-Caprivi Highway to the future harbour at Cape Fria just south of the border with Angola. Namibia is therefore ready to play its role in the movement of goods into and out of the SADC region by providing reliable and cost-effective transport routes to our land-locked neighbours.

Secondly, we have gone a long way in modemising the regulatory framework of the transport sector. The road users are now paying for the development of the national road network through a dedicated road fund, which is being managed by the Roads Authority. The eight major airports in the country are now being operated by the Airports Company and my Government is presently looking at the restructuring of Civil Aviation and Maritime Affairs. These are but only some of the developments in the transport sector of Namibia.

In conclusion, let me therefore make one final and important point. The onus to improve the efficiency of transport does not rest only with Governments. The role of Government is to make policy, facilitate institutional change and create an enabling environment for both local and foreign investors. On the other hand, a substantial responsibility rests on the private sector to grasp the opportunities, which are now becoming available in our respective SADC Member States.


SESSION 1

SADC GROWTH AND INTEGRATION POTENTIAL

1.1 Potential and Prospects for Growth and Integration of the Southern Africa Region

Dr. Angelo Mondlane, Chief Economist, SADC Secretariat, on behalf of Dr. Prega Ramsamy, Executive Secretary of SADC

Chairperson, Honorable Ministers, Members of the Diplomatic Corps, Representatives of SADC's Cooperating Partners, Representatives of the Private Sector, Distinguished Delegates, Ladies and Gentlemen.

It is a great honor and pleasure for me to have been given the opportunity to address this, forum on the very important subject of investment in the SADC region.

While the issue of investment cuts across all sectors of our Region's economy, the focus, of this forum is specifically on the opportunities and challenges facing the transport andl communications sector in SADC. I am convinced that the SADC region provides great opportunities for investment, not only because of the Region's abundant and still untapped natural resources, but also because of the enabling environment created by macro-economic policy reforms, implemented by most of SADC Member States' governments, particularly since 1990.

In my speech today, I first want to give you an overview of the Region, by providing you. with some economic indicators, before I concentrate on the SADC Region's potential for investment, particularly in the sector of Transport and Telecommunications.

SADC has a population of about 192 million and a GDP of around 170 billion US Dollars. SADC's largest countries in terms of population are DR Congo (47 million, people), South Africa (42 million people) and Tanzania (32 million people). In terms of the Region's GDP, South Africa is by far the largest economy with close to 70% of the Region's GDP. followed by DR Congo (an estimated 7%), Tanzania (5%) , Angola. (4.5%). Zimbabwe (4%).

Annual growth rates of real GDP were 1.6% on average in the 19807s, but have picked up significantly since then. The past 5 years, the annual average GDP growth was 2.8%, with, acceleration in the economic growth, owed to stabilisation geared macroeconomic policies, increased investment and liberalisation of trade and capital flows.

As a result of the introduction of comprehensive stabilisation and structural adjustment policies, inflation has been reduced to or maintained at one-digit figures for SADC as a. whole since 1997. In 1998, 8 of the 14 SADC Member States recorded inflation of below 10 %.


Member States have done a lot over the past decade to become a destination of choice for the international investors. The return on investment in SADC is estimated at over 30%, on average, higher than in most developing countries. A large number of investment incentives are in place in Member States. varying from country to country. SADC is undertaking efforts to harmonise investment incentives in order to avoid that Member States out - compete one another at the expense of their budgetary revenues.

Another SADC initiative aims at establishing one - stop shops in all Member States so as to reduce the costs of information and of bureaucratic procedures necessary to comply with by investors.

Chairperson, let me now turn to elaborate on the investment opportunities existing in SADC for foreign investors.

SADC has identified a number of spatial development initiatives (SDIs), aiming at unlocking natural economic potential in specific Southern African locations through investment in transport infrastructures, thus laying the basis for complementary private investment along these comdors, thereby generating employment and creating opportunities for local business.

The portfolio of 800 investment opportunities valued at US $32.4 bn has been identified in the context of the Spatial Development Initiative in SADC. with the capacity to generate 85,000new jobs. These opportunities arise in the areas of infrastructure development, mining, privatisation of state enterprises and joint management of natural resources. Examples for Spatial Development Initiatives represent the first trans-frontier game park in Africa, combining the Gemsbok National Park in Botswana and the Kalahari Gemsbok National Park in South Africa; the Maputo Development Corridor - comprising 7 big projects which has already attracted investment valued at US $3bn; the Lebombo SDI is a three countries (Mozambique, South Africa and Swaziland) tourism development initiative, comprising 3 projects; and the Okavango Upper Zambezi International Tourism Initiative. There are similar initiatives between Mozambique, South Africa and Zimbabwe.

For the present conference focusing on investment in the transport sector, it is important to note that the Spatial Development Initiatives will represent one of the cornerstones of SADC's development approach over the next decade. And all these investment packages will have investment projects in transport and communications as the vital nerve to drive investments and development in all sectors.

Another factor of significance for the investment climate in Southern Africa is the implementation of the SADC Trade Protocol since 1 September 2000.

This Trade Protocol will lead to the creation of a SADC free trade area (FTA) by 2008, involving the elimination of tariffs and non-tariff barriers on intra- SADC trade flows. As from 1 May 2001, 8 SADC Member States are trading among each other at tariffs, which are reduced step by step over the 8-year time frame.


The Summit as its Extra-Ordinary Meeting held in Namibia, Windhoek, on 9 March 2001, approved proposals by Council on Restructuring SADC Institutions and their operations.

The key aspects of the SADC Restructuring process include the following:

Two critical objectives were added, namely poverty eradication (as opposed to alleviation) and HIVIAIDS;

Centralisation of the work of SADC away from Sector Coordinating Units and Commissions to the Secretariat (abolition of SCUs and Commissions);

Abolition of Sectoral Committees of Ministers and their substitution by an Integrated Committee of Ministers;

The formulation and implementation of a Regional Indicative Strategic Development Plan;

Establishment of SADC National Committees embarking a wide section of stakeholders;

Formalisation of the Troika as one of SADC's institutional mechanisms;

The establishment of a Regional Development Plan.

Chairperson, in essence. the restructuring process has given the Secretariat more strength1 in terms of expanded mandate and the number of staff. A new Department of Strategic Planning, Gender Mainstreaming and Policy Harmonisation will be established which1 essentially becomes the "think t a n k of the organisation. The emphasis of this new Department will be, as the name suggests, on strategic planning and policy harm on is at ion^ taking in to consideration the need for gender balance. This department will be supported1 by four Directorates. which are:

Trade, Finance, Industry and Investment;

Infrastructure Development and Services;

Food, Agriculture an Natural Resources:

Social and Human Development and special Programmes.

Specialised Technical Committees and Sub-committees will continue to exist and feecl inputs on policy, strategy and programme development into the Directorates. This will nolt only ensure the effective participation of member states, but also the quality control of aspects of policies, strategies and programmes.

Member States ownership and participation will also be enhanced through the creation of SADC National Committees. The National Committees will comprise of all stakeholders, including the Private Sector. These Committees will primarily be responsible for making inputs into SADC business at the technical, integrated committee and Council levels.


As we heard earlier this morning from the Deputy Minister of Trade and Industry, Hon. Bernard Essau, in his opening statement, the SADC region has enormous growth potential which is waiting to be harnessed by all of us for the benefit of the majority of the people of Southern Africa.

Mr. Chairman let me state right from the onset that Africa is not poor as always portrayed in many fora throughout the world. On the contrary Africa is endowed with natural and mineral resources, land and water. All these are waiting to be exploited and put to meaningful use by us. One of the explanations as to why Africa's abundant resources have been exploited in most of our countries can be attributed to poor transport infrastructure and networks. The region's transport system still faces challenges of accessibility, affordability, efficiency, viability and general quality of service.

Historically Africa has been subjected to various problems that have compromised its development agenda. These have been included amongst many:

Slave trade;

Colonialism;

Apartheid;

Civil wars which unfortunately are still occurring in some of our countries;

Coup d'etats.

However, after the liberation straggle and most of our countries became independent most African governments had an impressive record of investment in infrastructure. Unfortunately, this transaction was not matched by corresponding ventures in maintenance. In addition there was no effective management of these structures. Lack of' maintenance and poor management were further exacerbated by government ownership and creation of public monopolies, which were characterised by lack of competition, poor. service delivery, and losses, which had to be underwritten by governments.

Mr. Chairman, unfortunately, the long - term impact of this state of affairs was not just deteriorating infrastructure, inefficiencies and expensive service, but more significantly, lost opportunities as a result of using scarce government resources to sustain loss malung public enterprises instead of these resources being used in other needy productive sectors.

Africa can now learn a lot from how other economies of the world have developed i.e. America and Japan and now China, as it focuses on its development agenda. Physical and. information transport has to be central to all Africa's development plans. Unfortunately. Africa has not given priority to transport and furthermore has not appreciated that it is key to its development agenda. It goes without saying that without a well-developed. integrated and efficient transport system; there can be no meaningful development in any country as well as economic growth.


Secondly there will be. increased trade between our countries and thus promote regional and economic growth among our various countries. This way, the weaker economies in the region will benefit from the stronger economies. 1 believe that th'e free trade which was recently launched in Zambia will only have a meaningful impact when issues of transport have been addressed fully:

And thirdly we shall witness improved linkages between our countries, which will in turn promote peace, not only in one country but also between our countries.

Mr Chairman, I have spent time outlining the history and problems as I see them in Africa, I want to spend the next few minutes sharing with the forum the issues that need our focus and urgent attention. The issues are many and hence my list will not be exhaustive. Nevertheless, I want to share with you only five issues I consider as critical:

1. The first being investment in the transport sector. The investment we require is:

Rehabilitation, upgrading and modemising, existing infrastructure;

Opening up new areas of investments with special emphasis on bridging critical missing links between counties such as rail links and road networks;

Investment in rural transport network.

However as we look into the future it is important that we share my worries as well on the way investments are taking lace on the continent. Unfortunately, the way investments arle taking place in most of our countries does not give room to economic growth. Mos,t investors are only interested in already existing structures and not prepared to invest in new areas of our economy.

This can be attributed to the way Africa has been portrayed negatively by International Community, the Press, those in opposition and Civil Society. It is usually referred to as the Dark Continent, full of poverty, low capacity to achieve anything, incompetence antl corrupt leadership.

We need to find a formula to move from this scenario to one that will help the world appreciate that Africa has the potential and capacity to be equal partners with the Developed world. This will build new confidences levels in Africa. In addition, while we do appreciate private sector participation I believe that the way forward for Africa is to learn to focus on serious investors who will forge long-term partnerships with the indigenous people.

2. The second issue is that of creating of conducive, open and competitive macro economic environment, clear transparent regulatory frameworks, laws antl institutions to support investment. We must admit that these are new areas to us, as; we are essentially seeking to transform our old ways of conducting businesis to new approaches. In this regard, we shall require assistance from those with the necessary expertise.


Allocating adequate resources in our budgets for infrastructure development;

Forging lasting partnerships and dialogue between the public and private sector;

Bringing professionalism to the transport sector;

Be careful not to replace public sector monopolies with private sector ones. as this can be as detrimental as was the case before.

Mr. Chairman, distinguished delegates, it will be fair to add that, collectively as a region and individually, our countries have gone a long way towards addressing some of the issues I have outlined above.

For example regional and sub-regional organisations such as SADC and COMESA are complementing national efforts with other regional and sub regional efforts. SADCC countries now have a protocol on transport, communications and meteorology.

The Protocol on transport, communications and meteorology is a binding legal agreement and has now been ratified by all the member states of SADC. It binds all our countries to a common objective thus; our countries are committed to evolving an integrated, seamless transport system across the region but one that is also efficient and responsive.

COMESA countries on 31 October 2000 launched the free trade area (FTA) in Lusaka, Zambia. This is aimed at increasing regional trade. and economic growth.

1 would encourage those of our colleagues from outside the region, particularly those of you from the private sector to take time to attend the various country exhibitions and to interact with Ministers who are present here as well as officials, so that you can learn more about the far reaching reforms that the region has undertaken.

In Zambia for example, since 1991 the Government has embarked on aggressive economic reforms that have seen the privatisation of our copper mines, liberalisation of telecommunications, aviation, water and rail networks.

Way Forward - I therefore urge all of us to:

Be proactive by reaching out to as many investment partners as we possibly can;

Totally transform the region by focusing an change of attitude to development programmes;

Invest adequately in both the physical transport sector and information transport;

Take collective action as a region;

Develop long term programmes that have a multiplier effect;

Avoid substitution of public sector monopolies by private ones.


SESSION 2

THE INVESTMENT CLIMATE

Private Sector Perspectives on Conditions for Attracting Investment

Paulo Fumane, Coordinator, Nacala Development Corridor

SATCC Transport Investment Forum

Wnndhoek, April 24,2001

INVESTMENT CLIMATE

Nacala Development Corridor:

Public-Private Partnership in Transport Project

Paul0 Fumane, Pmj. Manager

Geographical definition

9 I n Mozambique: the Nacala Port, and the geographical areas bordering the Nacala Railway line to Entre Lagos Railway line and Cuamba- Lichinga Railway line and Lake Niassa.

5 I n Malawi: the whole Southern Region of Malawi and the following districts in the central region: Ntcheu, Dedza, Salima, Dowa, Lilongwe and mchinji as well as the land masses on Lake Niassa.

Eastern part of Zambia

Transport lnveshnent Forum 2001

Key Projec ts

Nacala Por t a n d Rai lway l ine have been concessioned t o CDN - Corredor de Desenvo lv imento d o Norte.

Concession o f t h e Nacala Air M i l i t a ry Base . B lan ty re - Nacala road

Guru6 - Cuamba - Lichinga

Long hau l t ranspor t i n Lake Niassa

N D C a s ir ivestment des t ina t ion

St ra teg ic Overv iew: t o l i n k land locked M a l a w i t o t h e p o r t o f Nacala i n Mozambique and t o e x p l o r e economic p o t e n f i a l i n t h e region.

B o t h t h e Mozambican a n d Ma law ian Governments w i l l c o n t i n u e t o expand a n d rehab i l i t a te t h e in f ras t ruc tu re i n t h e Corr idor , w i t h emphas is on t h e t r a n s p o r t a n d te lecommun ica t ion in f ras t ruc tu re .

The overa rch ina a o a l is t o encouraae o r i va te - - - 7

sector par t i c ipa t ion in in f ras t ruc tu re d e v e l o p m e n t based o n innova t i ve moda l i t i es o f I m p l e m e n t ~ n g t h e in i t i a t i ves : t h e Pub l l c -Pr i va te Par tnersh ip .


3 k e y requ is i tes for a T ranspo r ta t i on p ro j ec t

T h e p r o j e c t m u s t fit in to a t r a n s p o r t a t i o n m a s t e r p l a n

3 k e y requ is i tes for a T ranspo r ta t i on p r o j e c t

T h e p r o j e c t m u s t f i t i n t o a t r a n s p o r t a t i o n rn a s t e r p l a n I n v a r i a b l y t h e r e n e e d s to b e c r e d i t e n h a n c e m e n t o f s o m e s o r t

3 key requisites for a Transportation project

The project must fit in to a transportation master plan Invariably there needs to be credit enhancement of some sort there is a well defined and transparent process


3 . T r a n s p a r e n t P r o c e s s

o p e n t e n d e r s fo r c o n s t r u c t i o n p r o p e r l y a d j u d i c a t e d b i d d i n g p r o c e s s l eg i s l a t i ve f r a m e w o r k p r o j e c t p r o t e c t i o n

T h e W a y F o r w a r d

S A D C in t h e c o n t e x t o f t h e s e 3 k e y r e q u i r e m e n t s ?

C o n c l u s i o n ( the r o a d to s u c c e s s )

Transport investment Forum 2001

An analysis of global FDI flows tells us firstly that they have been increasing over the years. This is explained by rising globalization, the expansion of international production and the increasing wave of Mergers and Acquisitions. This trend is also explained by the quest of countries to attract more FDI and the desire of companies to spread activities over different locations to remain competitive and to capture new markets.

In 1999, global FDI inflows reached $ 865 billion, representing an increase of 27 % over the previous year. Indications are that FDI flows may well have surpassed the 1 trillion USD mark in 2000.

The second fact to be noted is that the FDI flows have remained concentrated in a handful of countries, mostly developed economies. These attracted some $ 636 billion in FDI inflows in 1999, accounting for nearly three quarters of the world's total. Developing countries attracted only $ 208 billion in 1999, with some $ 106 billion going to developing Asia, $ 40 billion to China alone, $ 90 billion to Latin America and the Caribbean, $ 3 1 billion to Brazil and a mere $ 10 billion to Africa.

To get a clearer picture, let us look at two charts, which shows us FDI outflows and inflows in 1999 in billions of USD:

FDI Outflows (Originating Countries) FDI Inflows (Recipient Countries)

United Kingdom 199 United States 276

United States 15 1 United Kingdom 186

France 108

Germany 52

Sweden 82

France 39

Netherlands 46 Germany 26

Spain 35 Japan 13

Japan 23 China 40

Sweden 18 Hong Kong 23

Korea 10

Brazil 31

Argentina 23

Mexico 11

(Africa) 10

From the figures in this chart it becomes evident that Africa, which comprise 54 countries,, is doing poorly with only $ 10 billion in FDI inflows.

Transporl Investment Forum 2001

If we take a look at SADC. we see that FDl inflows in 1997 were a mere $ 2.9 billion. If we exclude South Africa, this figure drops to $ 1.2 billion. Inflows have remained more or less the same ever since. Thus total SADC inflows even including South Africa has remained much lower than individual countries such as Malaysia and Thailand. What does this tell us: That we have serious problems. Despite the fact that we are blessed with plenty natural resources, that profitability on investment is high in our region. that all governments in SADC have taken a series of actions to improve their investment climates. the truth remains that things are just not happening as they should have when it comes to FDI attraction.

The constraints, which are the reasons for the low level of FDl into SADC, occur at various levels: Macro, Meso and Micro and it would be appropriate here to highlight some of them.

All of these constraints should be considered as important as the other and this is why I am not pinpointing them in order of importance;

Inadequate supportive and enabling environment for investment;

Weak capacity in SADC intermediary organizations;

Insufficient information on potential foreign partners;

Lack of social and political stability;

Weak private sector;

Weak partnership between governments and the private sector;

Weak physical infrastructure;

Underdeveloped human resource base;

Lack of transparency;

High level of extortion and bribery;

High administrative costs:

Poor access to finance;

Difficulty in accessing global markets;

Low productivity;

Poor availability of information on bankable projects;

Small market size;

Poor domestic savings;

Transporf Investment Forum 2001

Image and Perception

This is another serious issue. We are not perceived as SADC, but as Africa. We are not perceived as a continent comprising some 54 countries where opportunities abound for investment. We are perceived as an entity, as a continent plagued by famine, diseases such as Aids and wars, as a continent where comption is the rule of the day, a continent where nothing positive can happen. This is how the outside world perceives us to be and until we all join hands to change this perception, we will not reach very far in our efforts at attracting investment.

High costs of Doing Business

While all countries are taking actions to improve their investment climate. it is a known fact that investors still experiences tremendous difficulties to get their project to an operational stage. There are still long procedures and formalities to follow, there arc: myriad of application forms to fill asking very often irrelevant questions which put off the investor right from the beginning, there is the issue of corrupt practices, the long delays in securing work and residence permits, confusing rules and regulations, and this list can go on and on. Once again unless actions are taken to remove once for all these unnecessmy impediments, investment attraction will be difficult.

Investment Promotion Agencies

These are responsible for promoting Foreign Direct Investment. Today all the SADC: countries have their Investment Promotion Agencies. While they are doing their best with the resources and tools available to them, I have noted a number of weaknesses common to many of these agencies whether in SADC or Africa. And unless these weaknesses arc: addressed as a matter of urgency, it will be difficult for them to compete with their counterparts in regions such as South East Asia, Eastern Europe and others. The following weaknesses are noteworthy:

No systematic investor targeting;

Ad-hoc promotion campaigns;

Too foreign investor focused;

Poor sector research;

Poor information delivery capacity;

Poor synergy with key Organizations;

Absence of effective communication with client base;

Too event driven;

No coherent and coordinated vision, strategy and plan;

59

Transport Invesfment Forum 2001

Allow me to stress that in SADC we are gradually becoming one community, one free trade area, and one regional bloc. Therefore the key to solutions will need to come from collective brainstorming and joint approaches to solving problems and realizing set objectives. If every one start shooting in different directions. as often is the case, there can only be chaos and no progress can be made. We have identified a number of constraints hampering FDI inflows into the region. The time has come for all member states to sit together, find joint solutions to these constraints, and address them once for all. The time for talking seems over and the time for action has come.

Let me give you some further concrete examples on how such collective efforts can prove to be of tremendous benefits:

A joint SADC representation at the World Economic Forum can already be a starting point to change this negative image visa versa the business community. Similarly a well planned publicity and marketing campaign in selected regions on SADC investment opportunities could bring positive results. Likewise, a SADC Investment Promotion Division within the SADC secretariat could go a long way in facilitating investment and disseminating opportunities in SADC.

Again, in view of the small market size of member states. there is an urgent need to view SADC as a single enlarged domestic market and to sell this image abroad. Unfortunately instead, the principle of the survival of the fittest seems to be still prevailing with competition to attract investment becoming more and more severe. Similarly we see each country offering additional incentives to beat the competition to attract investment to the point that this is becoming self defeating, resulting in more bargaining power for the investors. What instead should have been done are joint actions to make objectives such as the harmonization of incentives, rules and regulations a reality.

Similarly, a number of well-planned, cost effective investment promotion campaigns could be undertaken jointly for the benefit of all. Resources will thus be pooled and the campaigns can be launched on a wider scale when it is done jointly. Excellent examples of such joint initiatives are: Tourism in Caribbean- Trading Blocks such as NAFTA, ASEAN, Mercosur- South East Asia triangles. Thus a regional approach to investment promotion will ensure that scarce resources are pooled together for overall objectives that will ultimately benefit all. There will be many advantages in such collaboration:

Enhanced visibility to investors;

Increased cross-border investments;

Cost savings on certain activities;

Improved regional image;

Development of closer economic ties and policies;

Better possibility of access to additional donor funding.

61


SESSION 3

STATUS OF REFORMS AND PRIVATE SECTOR PARTICIPATION

3.1 Status of Implementation of the SADC Protocol on Transport, Communications and Meteorology (PTCM)

Sandra Coehee, Managing Director, Consilium Legis (Pty) Ltd, South Africa

O U T L I N E O F P R E S E N T A T I O N

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C O N S O L I D A T E D S U B - S E C T O R A L R E P O R T C A R D

R E F O R M T R E N D S

S l n c e 1 9 9 8 t h e t r e n d s , e r n a l n r o l m o r l p r o g r e r s l o R o a d s f o l l o w e d b y n o a d r r a n r p o r t c ~ v ~ ~ a v i a t , a n a p o r t s l n f r a s l r u c f u r s o p e r a l 8 o n a S n r t # l u l # o n a . e l a r m r in l n t e g r a l s d l l a n s j o r l h a v e n t s h o w n Ins s a m e P a c e a f r s l o r m r B m o b i # z a I # o n h a w s u e r I h e p a c s I S p , c t , n g u p , c o r r o o r I n I t a l l r s s - r s g l o n a l p r r a , e s s c , o r P a r l c I p a I l n g / I e a d I n g a c t r e 1 y j . T r e n d fa c a p l t a l i z s o n e x s , , n g s l r e n g l h s a n d h e s l a n c y l o m o v e " f a " n r h a r f e ' e d r e r r t o r y . D s r p l e p r o g r e s s n e n a c t n g enabling l e g a l f r a m e w o r k s w o r k s n o t C D m . 2 l s l e . C o n r e l r u s o n h a r m a n z e d m o d e s n a r b e e n achieved b u I c o o r d i n a l e d e n a c l m e n , m o b l l l z a l l o n ( e m a l n s d c l l l c u I 1 - M C A P n r o ~ r e s s d n e v e n . P r o g r e s s n n t r o d u c n g P P P s . S o m e p r o g r e r r w ~ t h i n d e p e n d e n t r e g u a : o r r . s o m e h a v e r e p o r l e d n e e d f o r c a p a c I t y r I r e l g I h e n I n g e s p e c a 1 , y n r e s p e c t o f t r a d n g O r a c f I c e r )

P U B L I C I P R I V A T E P L i F ! T N E R S H i P S : W H A T C A N S T I L L B E D O N E ?

Transporl Investment Forum 2001

3.2 Financing Options and prospects for Private Sector Participation in Infrastructure in Southern Africa Michael Meeser, Director, Infrastrttcture Finance, Investec Bank,

South Africa

M a r k e I s t o r I n I r a E l r u c t u r e F n a n c e

I n f r a s t r u c l u r e F 1 0 a n c e

- F O C U S m a n t y a n S a u t h A f r c a n p r a l e c f s . D ' a r o n p a , a e 1s 8 " o l " e r c o u n l r l e s a n d r e c t o r s . P r n c , p a 1 o b , e ' I , " e - n o 1 a s t a p D r > a c n - u n d s r r l a n 0 d f l ? r e P l m . r i e 1 . D 0 e , I s I

- m a I r h p r o c r t l o r n u . c e r o f , . a n s s

D e b l a n d e o u , l y

n v e s l e c B a n k

i n d e p e n d e n t s p e c a ~ s l ~ r n k G c o u p . o n e o t ~ o a r g e r l c o m p a n i e s 1 8 r l e d o n t h e J S E M a r k e l c a p ~ l a l o t a p p r o r m a t e y R r i b n ( 8 2 l b n ) . S h a r e h o l d e r F u n d s a ! R 8 5 b n ( 8 1 i b n l

I n v e s t e c B a n k

P r o l e c 1 a n d I n f r a s t r u c l u r e t e a m c o n s l s l s o 1 rn u 111 - d I S c p I h n e d n d I V d u a I s A d v s e d a r r a n g e d a n d c l o s e d t h e t l r e t Ihrn t t e d r e c o u r s e p r o j e c t f l n a n c l n g I " S o u t n A f r l c a

M a n d a t e l n c l u d e s t h e o r o v l s l o n o f a d v s o r y s e r v l c e b d e b t a n d e q u l t y u n d e r w r l t l n g a n d a r r a n g l n g . C u r i e n t l y m a n d a t e d a n p r o ) e c I s ~n r o a d s p r l s o n s w a t e r a n d l e 1s u r e s e c t o r s


N 1 W a r r n b a t h s l o P e t e r s b u r g - R 5 5 0 m on d e b 1 - D e b 1 s e r v r e ~ ~ n c o n d l l o n a l l y g u a r a n t e e d b y R S A - T r a I I r r s k ( a n d r e r a r d I r e l a I n e d b Y S A N R A - N O p e r f o r m a n c e r s k o n d a o t s e r v ~ r e - 2 3 7 5 y e a r c p l h n k e d d a b , a l c p p l u s 4 % r e a l

S i r u c l u r e d r a t h e r l h a n p r o l e c t f l n a n c e L o w e s t c o s t o t f u n d s

T h e e v o l u t i o n

N 4 M a p u t o C o r r l d o r - R 1 4 g 4 m s i l o n d e b I p l u s R 3 3 o ~n ~ l i ~ o n e q u t y - L m t e d r e c a u r s e p r o l e c I I l n a n c e - T ! f l C a n d p e r f o r r n a n c e r l s k b o r n e b y c o n c e s s 8 0 n a # r e

- R S A l u p p o r l n d e f l n e d c l r c u m 5 1 a n l e 5

- 2 0 y e a r c p n k e d d e b t a r c p ~ p u s 6 % r e a l - 1 5 - 2 0 y e a r b a r k d e b t a t a v e r a g e m a r g l n 0 1 2 5 %

S u b s t a n t l a I r l s k t r a n s f e r t o p r t v a t e s e c t o r . E s l a b 1 1 s h e d rn a r k e t p r e c e d e n t s


N 3 H e l d e l b e r g t o C e d a r a - R 1 7 6 6 8n 1 1 1 0 n d e b l p l u 5 R 3 6 2 rn l l h o n e q u l l y - L m # l e d r e c o u r s e 0 r a l e c t f l n a n c e - T i a f t ~ c a n d p e r l a r m a n c e risk b o r n e b y c o n c z s s o n a r e - R S A s u p p o r t n d e l ~ n e d c l r c u m s t a n c e s - 2 5 y e a r c o - I < n k e d d e b t a 1 c p p l u s 6 5 % r e a l - 2 0 2 5 y e a r b a n k d e b t a t a v e r a g e m a r g ~ n 0 1 2 4 %

I n c r e a s e d r l s k t r a n s f e r l o p r l v a t e s e c t 0 r - F u t u r e e x p a n s o n 3 a n d u p g r a d e s - ~ e r m l n a t l o n c o m p e n s a l ~ o n


N 4 W e s t P l a t ~ n u m Highway - R 2 1 b 8 l i o n d e b t p l u s R 6 9 0 m l l l l o n e q u l l y - L l m r e d r e c o u r s e p r o j s c l f l n a n c e - R S A 5 ~ p p o r t ~n d e t l n e d c r c u m s t a n c e s - 2 0 y e a r c p l - l l n k e d d e b t - 2 0 y e a r b a n k d e b t a t a v e r a g e m a r g ~ n 0 1 2 5 % . l n c r e a s e d r l s k t r a n s f e r t o p r l v a t e s e c t 0 r - E x t e n d e d P a y m e n t 0 p t o n s - T e r m nation e v e n t s - 0 p e n ~ n g o f T o l l P l a z a s

Transport Znvesiment Forum 2001

3.3 Road Reforms in Southern Africa and Prospects for Private Sector Participation

Mike Pinard, Managing Director, InfraAfrica Consultants, Botswana

Outline of Presentation

+:. B a c k g r o u n d

.:. R o a d S e c t o r R e f o r m s

.3 O p p o r t u n i t i e s f o r P r i v a t e s e c t o r P a r t i c i p a t i o n

T h e W a y F o r w a r d

S u m m a r y 1

R~ckground

Road Infrastructure: Role/function

.:. Life blood of SADC economy Essential catalyst for socio-economic development

2. Most pervasive of all economic activities > 80% travel by roads

-:. Substantial contribution to GDP 5-6% GDP

Beckground

The SADC Sur

Now almost 1 M km

-one of intra- regional travelltrade

Substantial replacement value

"Special Asset"

rface Transport Network


Background

Attitudes to Maintenance

Background

SADC Roads -High Operating Costs

The "V~cious Cycle" of Infrastructure Management

Background

Roads in Crisis!

Trans~ort Investment Forum 2001

Maln pallcy document behnd t b reform process ~n the SADC rr

Road Sector Reform

New Approach to Road Management

Reform strategy based on the commercialisation of road management thro' implementation of the four "building blocks" which form the basis of the reform initiatives

Logic of the four "building blocks"

Ownenhip ~lnanclng ~esponslb~l~fy Management

Road Sector Reform

The SADC ProtocoI @ SADC Protocol on Transport, Communications and ~ Meteorolog i s main policy document behind reform process i n ~ A D C reglon.

licy directives of Protocol are transposed into a Broadgo Roa s Act w ~ t h . the following goals:

providing a framework for the commercial management of roads incorporating public and private sector stakeholders

ensuring an adequate and stable supply of funds to the roads sector


Road Sector Reforms

Opportunities for Pvt Sector

Regional Associations - policy

.:* Consulting services

9:- Contracting Services

Long Term Maintenance Concessions

*:*More work being done under long-term contracts which combine routine & periodic maintenance

9 Generally apply to part of the network & may - use performance based specifications

+ include some capital works (e.g., rehabilitation, upgrading etc.)

+Have resulted in improved quality and major savings in costs

Maintenance Concessions Cont.

Growing interest in concessions at local government level - driving force is small scale &weak local capacity

.t. Several initiatives to contract out planning & management under 1.t. concession agreements

3. Concessionaire acts as "agent" for local govt - *briefs elected members and plans road works

contracts out implementation of works oversees work of consultants & contractors

Transport Invesiment Forum 2001

Finally - Our Vision

od ruods

Within l o y e a n . all ruunlrieaul Ihr S A l l C r q i a n r i l l have ~ l l ~ t l z v ~ road I ~ ~ ~ C L P S

andallcar, a,rrnam,r.nanrr road urar

Operating a Seamless regional Rail Network and Rail Cooperation in the SADC Region Zandile Jakavula, African Representative, Union of African Railways

Contents:

Baskgmund

lnlroductlon lo Spoornet - Itsc~pab111t1es and areasof expenlre

Experience in SADC and the rest o l the Atrlcan Conflnent

TOPIC OPFCIRC #IF8779

A n Integrated operational system (cross-border)

. Benellls o l a regional approach versuo a national (local) approach

I m p a c t on ConrumDrr (cost raving*. etc.1

.Regional successes

s t e p s taken to become a regional player

lnverlment ruppon required to become sompetltlve

In t roduct ion to S p a a r n e t


he w o r l d l e a d e r ~n t e r m s 01 O p e r a l l o n r o n the 1 m e t e r g a u g e n e t w o r k s o f t h e w o r l d t h a l i n c l u d e s lOOOmm a n d 1 0 6 7 m m g a u g e .

T h e m o s t im p o r t a n t p l a y e r i n A I r l ca o u t r i d e S o u t h ~ t r i c a in R a i i w a v s e r v i c e s

. S p o o r n e t ' s r a i l i n f r a s t r u c t u r e r e p r e s e n t s s o m e 80% o f

A f r i c a ' s r a i l I n f r a s t r u c t u r e . S p o o r n e t h a s se t , a n d e x c e e d e d , w o r l d s t a n d a r d s f o r

w h e e l o n t r a c k p r o f i l e s . S p o o r n e t s t r u c t u r e s f o r o p e r a t i o n s a n d i n f r a s t r u c t u r e

e n s u r e a n d e n a b l e t h e a c h i e v e m e n t o f h i g h

t e c h n o l o g i c a l s t a n d a r d s

S p o o r n e l ln S A D C

R e g i o n a l and Nat iona l Ob jec t ives

. R e t a i n r o u t e s a n d f a c i l i t i e s t o s u p p o r t m a c r o e c o n o m i c

o b J e c t i v e s

. S p o o r n e t h o n o u r s S A D C r e s p o n s i b i l i t i e s b y

m a i n t a i n i n g s t r a t e g i c l i n k s w i t h n e i g h b o u r i n g

C o u n t r i e s

'' T h e countries 01 the SAOC r c g l o n n e e d to h a v e a

c o m m o n r1.1on l o r t h e goa1a 0 , d c r e l o p l n g a n d h s r m o n l s l n g r s l l t r s n s p o r l a f l o n In the r c g l o n .

e n s u r i n g o r d e r l y e l l l c l e n t c r o s s b o r d e r r a l l c 0 n " c " a n c c '


A n I n t e g r a t e d o p e r a t i o n a l s y s t e m . A

Hub (L Spoke Ram1 Servlces ProVldFP the

Entitles on the spakc backbone o l the long dlslance

provide a leeder P F ~ Y ~ C F transport Bystem and carrtes

over shorter dlslenSe9 the base load ot cargo I

1rom outlying areas pessengerl between malor

WIth llmltcd ,all

line

Benellls . ~ e t t c r v t~ l~sat ion o l auallable sapaslty .~educt ,on 01 handling. operating soste . " ~ o d e - l l l " I eppraprlete to travel distance . comlort an long route . R ~ I I and ~ o a d and alher made ealety

S c h e r n a l i c of S A D C C o r r i d o r s

Regional vs National Approach . Leveraging the capabilities of all railways in SADC and thus promoting railway development and the move back to

rail.

. Contributing to the ideals and objectives o f the country,

Africa Renaissance and the Milennium Africa Program

"MAP"

. Foster increased trade in SADC and thereby promote

development

Trans~ort Investment Forum 2001

. Founder member of the Southern Africa Railways Association " S W . Inputs into Moving South Africa, Developnent of the Regulatory Framework for Rail and Ports, SADC Trade -, Transpalation- and related fields and protocols . Democratic Republic of Congo (Zaire) - Sizarail- improved tonnage from 200 000 tons to 1.75 million tons in 18 m t h s with affiliate Cmmzar

Investment support required

A specifically designed SADC loan package to ensure that the entire region's rehabilitation and infrastructure development is catered for.

SADC pool to be used as negotiating leverage in its dealings with international financiers. . Access to sott loans andlor inexpensive capital funding. . Longer term lower equity returns

Investment support required (cant.) . RSIS (Rolling stock information system)

Syncronised interline rail schedules

Interline Predictability

Customs

Inter-railway financial settlements

Data Integrity Project (automated equipment tracking)


Cus tomer satisfaction througholct the region thro predictable delivery

Regiona l c o m m i t m e n t to pred ic tab i l i ty processes C u s t o m e r d e m a n d i n f o r m a t i o n i n t e r c h a n g e d . Holist ic p l a n n i n g of jo in t lexchangeable rai l resources E n d t o e n d service p lanning E n d to e n d serv ice execution a n d m o n i t o r i n g

Significant progress Inter connec~ed Railways jointly plan and moni~or international traffic International movement Information System

(RSIS) is being financed by USAID. International land-based container corridors (Cape TownlDurban - Dares Salaarn) - Salellite phone in every train. Transshipment facilitieh: 3' 6" - 1000mm:Kidatu Lake steamers exlend link to Uganda and Kenya

Consignment Predictability

T h c C u s t o m s leg is la t ion in o u r reg ion m a k e s provis ion for in b o n d transit

T h e S A D C reg ion is fas t c a t c h i n g o n to the n e e d f o r c u s t o m e r sa t i s fac t ion

T h e sa te l l i t e b a s e d i n f o r m a t i o n s y s t e m

m a k c s t r a c k a n d t race easy

Transport lnveslment Forum 2001

R e a l S e c u r i t y f o r i n v e s t m e n t s c a n o n l y c o m e f r o m s a t i s f i e d

c u s t o m e r s

S u p p l y c h a i n C e r t a i n t y

E l l i c l e n c y d e p e n d s o n p l a n n i n g h o r i z o n 6 q u a l i t y a n d r e a c h o f c o m m u n i c a t i o n s

P u s h M o d e 1 - T h e p a s t A V E R A G E A C T I V TV % 0rd. r I r 0 0 k

L E V E L S

. I V . r . D . .OtI.41), I...$.

P L A N N N G

A V E R A G E S E R V C E . ~~.I$ID$.DoI L E V E L S . DStI1 .n . rk . I $ O L back . . *.<ti*. I" ..,"*.

F R E I G H T A R R I V A L U N C E R T A I N T Y


SESSION 4 INVESTMENT OPPORTUNITIES IN SOUTHERN AFRICA

4.1 Overview of Investment prospects in Southern Africa

Dr. Antonio Pinto, Chair, SATCC Committee of Senior Oficials

Mr. Chairman, Honourable Ministers, Distinguished Delegates, Ladies and Gentlemen.

Allow me to join others in welcoming you once again on behalf of the Southern Africa Transport and Communications Commission (SATCC) to this investment forum.

As has been said by Honourable Tomaz SalomBo, the Minister of Transport and Communications in Mozambique. who is also chairman of the Committee of Ministers of SATCC, we in SADC view this forum as the beginning of a process.

The documentation that has been presented to you showing an overview of investment opportunities in the 14 SADC member states is an indicative of the immense potential and therefore investment opportunities available in this region. We in SADC recognise that without efficient transport and communications systems, the investment potential of the region cannot be fully harnessed.

We therefore appeal to you potential investors and our cooperating partners that after the positive things, which we hope, you have learned from this forum, you will be encouraged to explore investment opportunities in the individual countries.

It is also our hope in SADC that our member states will view and use this forum as a launching pad for their own specific investment promotion efforts at national level. To succeed, they will need your support.

As can be appreciated, and this is something that our traditional cooperating partners are well aware of, we have serious capacity constraints within our governments, including regional institutions, such as the SATCC Technical Unit, to push the reform process forward. Without external support, we simply do not have the capacity to carry out the technical analysis. drafting of new legislative frameworks and other technical work that is required to push the reform process forward.

Mr. Chairman, distinguished delegates, let me repeat a theme that has been said throughout the various statements that have been made by others before me.

That is the fact the region is committed to developing integrated and seamless transport and communications systems, as this is the only way that we can have a fully functional and integrated market.

Tmns~orl Investment Forum 2001

There could be collaboration of entrepreneurs in respective countries, collaboration across countries and collaboration with outside investors. We are not yet seeing enough of this in the region. There are immense investment opportunities in the Development Conidors and Spatial Development Initiatives (SDIs) as well in the transport sector specifically. The purpose of this session is to enumerate these opportunities. The various experts wi1:l talk about investment opportunities that are available and I hope potential investors will find something of interest to them.

In this regard, let me take this opportunity to thank our two experts who worked very harcl despite a major time constraint to put these profiles together on behalf of SATCC with funding made available by the World Bank and USAID. Let me also thank the consultants that helped SATCC with the technical oversight of this forum. This was made possible with the financial support of the Development Bank of Southern Africa (DBSA).

Mr. Chairman, distinguished delegates, let me thank all others who have been involved in putting together this forum, which is a major milestone for us as in SATCC. Last, but not least, let me thank the cooperating partners who supported this forum and all our member states for their commitment without which this forum would not have been possible. Thank you all.

4.2 Investment Opportunities in Transport in Southern Africa

Nils Bruzelius, Consultant

R e c e n t D e v e l o p m e n t s

. N 9 w P o l i e l P s : P r o l o r o l o n TI." s p o r t , C o m m Y I t c n l i o l s 0 1 d M e l r o r o i o g y 8 n t h e S A D C

P r l r D t 1 9 8 1iO 0 . D e r e l a p r n e n 1 C o r r i d o r a / S D I s . Irn p l l c s l i a o 1 : N e w D P P D I I Y o i l i e r f a r p r i v a t e 10 1 9 8 1 0 1 s . I m p l l r s t i a o 2 : ' N o w r o l r r ' f o r d o n o r s a n d l F I s

T h e B a c k g r o u n d P a p e r

C o u n l r y b r l e l s - p o l l r y a n d l n ~ t l t u t l o n a l c h a n g e r D e v e l o p m e n t C a r r I d o r s / S D I s P r l v a l e s o c l a r p r o j e c t s - a r d l o a r y , r e g i o n a l , a n d p r o J e c l c o n c e p l s P u b l l r s e e t a r p r o j e c t s

Transoorf Invesfment Forum 2001

P u r l s ( C o n c e s s i o n \ u f t e r n , i n a I s a n d m a r i n c

s e r v i c e s ) . P n r , s r h a ' a i r , \ I s 1 . m B l " " I I

. P s r I h p y u r a i I n c ~ ! r : \ a ~ u I h A r r i c 2 , . 'r a r m i l l l l . i n A n l s l a n P , , r , r . n s c i n c \ r r , i r r i i n r l ~ c e l r n P n r l . . P s r I n r , t e r m i n a i r , S < , U I h 4 I'r i c d , . P s r I a 1 H r i r x , \ I < , , a m h ~ c ~ u e # . 1 4 n r r n i a I, a r h n u r . A " I h s r , , ,

R a i l w a y s ( C o n c e s s i o n o r E Q U )

C F h l - \ I M o d a m h i g u e ) . C " a n t h a t o I i c h i n g a K a i l m a ? I. i n c - Z a m h i a R a i l w a y s L i n t i t e d ( a n d hl a I ~ , h e ~ i R a i l w a y I

N a l i o n a l R a i l n a y a o f Z i m h a h w c . S H a z i l a n d K a i l m a 5 . M a r h i p a n d a a n d S e n a R a i l m a ? I. i n e a

T h e R a i l w a y i n S o u t h A f r i c a ( C o n c e s s i o n s )

- h u s i n e \ \ u u i l h o f S p o o r n e t - C o a l l i n h - 0 r e x I . u r r a i 1 (; e n e r a l F r e i g h t U u 5 i n e s s

T o l l R o s d s ( C o n c e s s i o n s )

S o u t h ,\ r r i ~ a 1 1 8 p r l ) i e ~ t > ~

h e m r n ) a l o h.1 n n z i n a T o l l R e s d ( S u s I i l a n d I

Z i n , h s b m c

\I o ~ a m I h i q u e

Transoort Investment Forum 2001

C o n r l u d i n g W o r d s

. A r e u e s e l l i n g t h e s i l v e r ? . N O , b e t t e r u s e o f t h e a \ a i l a b l e r e a a u r r v 5 . M a k e r t h e r e g i o n l e s s d e p e n d e n t

4.3 The SADC Upper Airspace Control Project

Onzari Nunzdu, Civil Aviation Expert, SATCC Technical Unit

S A D C U P P E R A I R S P A C E C O N T R O L C E N T R E ( U A C C )

A P A R T N E R S H I P : a S A D C P U B L I C S E C T O R a S A D C P R I V A T E S E C T O R a S T R A T E G I C I N V E S T O R S

S A D C I N T E N T I O N

J O I N T C N S I A T M S Y S T E M S I N T E G R A T E D A T S E R V I C E S - R E G I O N A L A U T O N O M O U S E N T I T Y

S A F E , E E E A T S E R V I C E S I N V O L V E S T A K E H O L D E R S

Transport lnvesfment Forum 2001

C O M l J U N E 2 0 0 0 D E C I S I O N 1 2 / 0 0

E N D O R S E S I N T E R I M S A D C U A C C , U A C C A S A D C C N S I A T M C O M P A N Y P R I V A T E S E C T O R P A R T I C I P A T I O N H O L D I N V E S T M E N T U N T I L U A C C S T U D Y R E S U L T S M O R E A S S U R A N C E S - M O R E W O R K

M O R E A S S U R A N C E M O R E W O R K

C O S T I B E N E F I T A N A L Y S I S

O W N E R S H I P S T R U C T U R E

I N S T I T U T I O N A L A N D L O C A T I O N

F I N A N C I A L O P E R A T I O N S

C U R R E N T S T A T U S

D O N O R F U N D E D A D D . W O R K

S T E E R I N G C O M M I T T E E

F I N A L R E P O R T S E P T E M B E R 2001 R E P O R T C O N S I D E R A T I O N B Y C O M l

D E D I C A T E D C N S I A T M E X P E R T

F U R T H E R W O R K A N D O P P O R T U N I T I E S

I M P L E M E N T A T I O N M A S T E R P L A N

L S A D C U A C C b y 2 0 0 6 R F U T U R E ( ? ) - I N T E G R A T E D S A D C

A I R T R A F F I C S E R V I C E S

Transport lnvestrnent Forum 2001

W h a t is S D I ?

S D I is a p a c k a g e o f m e a s u r e s t h a t a im t o a t t r a c t i n v e s t o r s i n t o a b u n d l e o f e c o n o m i c a l l y s u s t a i n a b l e p r o j e c t s in a r e g i o n w i t h p o t e n t i a l f o r g r o w t h . " ( l o u r d a n , 1 9 9 7 ) .

Key SO1 Aspects

Inherent economic potential; Configuration of investments to ensure infrastructure viability through sustainable revenue streams;

Crowding-in of investment; PPPs: public-private-partnerships and CPPPs; Political commitment; and

Rapid planning and delivery (momentum)

S D I ' s ARE N O T A S U B S T I T U T E FOR:

, Provincia l g r o w t h & deve lopmen t p lans , Pover ty al leviat ion st rategies

Rura l deve lopmen t st rategies 9 Holist ic in f ras t ruc ture provis ion I Overal l e m p l o y m e n t st rategy

Urban / m e t r o p lanning


INFRASTRUCTURE for integration:

)a". ".". 71 p r a n s p o r t 1

b STRATEGIC INVESTMENTS for industrial isation platform and to anchor infrastructure

DENSIFICAT ION to ach ieve synergies and

A susta inable development

"globalisation" "regional move f r o m I S t o I C integration"

(world t rade , W T O , as per OAU, Lagos rapid capital movement, PoA. Abuja decl.

International (SADC, FTA, reg. Competi.tiveness, e tc . .) S D I s . SAPP)

Transuorl Investment Forum 2001

Way Forward and Follow-Up Activities

Sakhe Silo, Principal Policy oflcer, SATCC Technical Unit, Maputo

Mr. Chairman, Distinguished Participants, Ladies and Gentlemen. It gives me great pleasure to witness yet another important milestone in the implementation of the Protocol on Transport and Communications with respect to the Marketing of Investmerlt opportunities in the transport sector of the SADC Region. 1 am completely overwhelmed by the participation levels we are achieved given the tight timeframes w i t h which we had to prepare for this forum. One should also acknowledge the support, which has been given by Member States in terms of their contribution towards the staging of this forum. I recall the heated debates, which took place during the Steering Committee Meetings on the issue of participation fee. Here I should also acknowledge my apprehension towards the fee at that time, as I believed it was going to be a deterrent to participation in the forum.

My fears have been proved to be baseless by this impressive participation from all stakeholders, that is, the governments as sellers, the private sector as buyers, and most important, the co-operating partners as facilitators and promoters of these Public-Private partnerships. The sponsorship and the exhibitors have also made an invaluable contribution towards staging this Forum. To the sponsors and exhibitors I say your presence is not onl,y noticeable but deeply felt by all present and I want to assure you that your marketing dnve has been unleashed during this Forum and the benefits will definitely offset the costs.

Mr Chairman, I am not getting canied away by what I witnessed, but I am trying to chart o~r map-out a way forward given this great response from the participants. I am convinced that, one needs to be innovative and be strategic so as to come-up with new approaches when planning to stage another Forum. Your willingness to pay the participation fees bears testimony that SADC has reached the threshold and the desire to sustain our Projects through our own efforts has been demonstrated by all stakeholders.

The critical mass necessary to place the Transport Investment opportunities on the market has been achieved and the challenge to member states is that the momentum created should not fizzle out. I would like to remind the audience that the Investment opportunities as outlined i11 the Background Paper is just a tip of iceberg considering that opportunities i11

Teleconununications, Postal and Meteorology sub-sectors have not been covered.

One cannot lose th~s opportunity but take full advantage of it and state that something has to be done for the Communications Sector. The challenge to all stakeholders is to stage i1 Communications Investors Forum. I view thls as a challenge because canying a begging bowl to donors is increasingly becoming an uphill adventure.


C. MARKETING AND INVESTMENT MOBILISATION

12. Setting up one stop investment processing units by all Member States particularly where they do not exist to fast track investment.

13. The investors to follow-up on projects as presented in the background papers with an indication of information required to move the projects forward. The contact addresses and e-mails are provided.

14. Improve the rural transport infrastructure so that it becomes an effective feeder system into the regional transport system and helps to create opportunities in the rural areas.

15. Promotion of the corridor development and the spatial development initiatives to unleash their economic potential by inclusion and prioritisation in the national development plans.

16. Aggressive marketing of the investment opportunities at National and regional level to sustain the momentum which has been generated through the forum.

17. A new approach to mobilisation of resources with provision and operation of infrastructure services being provided through the investment from the private sector whilst donor funds should be directed towards policy development and reforms.

18. Promotion of partnership with Chambers of Commerce, Investment Promotion Agencies and Privatisation Agencies as they can give the necessary impetus to the marketing of Investment opportunities in Transport.

19. Packaging bankable projects to attract lenders, and taking the project to the lenders at the right time.

20. Joint image building campaigns for SADC and the SADC Secretariat to play a leading role.

21. Regional approach to investment promotion and joint representation at fora such as the World Economic Forum.

22. Lenders to develop appropriate financing package for medium scale projects,

23. Joint promotion and marketing of available investment opportunities in the region by SADC Governments.

I believe, if all the stakeholders pulled together in a cohesive manner we can achieve more in terms of attracting local investment as well as foreign direct investment for the transportation infrastructure and systems of SADC.

Transport In vestment Forum 2001

We view this as an on-going process, which needs partnership involving governments, cooperating partners, investors, the financiers and the private sector generally.

These are on-going challenges that we all need to face.

Let me conclude by thanking:

- The Government of Namibia for graciously hosting the Forum and for their warm hospitality;

- Cooperating partners and sponsors who supported the Forum;

- Exhibitors for the excellent displays and for providing variety;

- Presenters and Technical Resource Persons for the quality of the presentations and management of the Forum proceedings;

- My Fellow Ministers who took this Forum seriously and stayed on to participa1:e and contribute constructively to the discussions;

- The Forum organisers, Conference Centre & hotel staff for their hard work;

- All the others who made this Forum the success that we consider it to have been.

I wish you all safe journeys to your respective countries and homes.

5.3 Final Remarks and Closure of Forum

Hon. Moses Amweelo, Minister of Works, Transport and Communication:s, RepubIic of Namibia

FeIlow Ministers, Cooperating partners, Investors from the region and outside the region, Distinguished delegates, Representatives of the media.

We have now come to the end of the SADC Transport Investment Forum. However. I must emphasise particularly to the potential investors and our cooperating partners that we view this as a beginning of a process rather than an end.

You will agree with me that we have achieved a lot over the past three days. It is also clear that as SADC governments, we are determined to move the process of implementing the Protocol on Transport. Communications and Meteorology forward so as to develop an integrated and efficient transport system for our region.


Together we can only succeed. Let me also thank the Chairman of the SATCC Committee of Ministers and the SATCC Technical Unit and all those who have beell involved in this Forum, for a job well done.

I know you have been busy, but I also hope you have had some opportunity to see a little more of Namibia and to meet our people. Thank you for coming to Namibia. Come back again, this time to invest.

I wish you all safe journeys back to your respective countries. Thank You.

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